Recent work examining the evolution of the wealth distribution has tended to not paid much attention to the role of asset prices. This column uses a new US dataset to explore the role that asset price movements have in the US wealth distribution. Asset prices matter because portfolio composition differs systematically along the wealth distribution. The data further show that no progress has been made in reducing wealth inequalities between white and black households over the past 70 years.

Racial income inequality continues to be a major problem in the US. To devise a coherent policy response, this persistent inequality must be understood in its historical context. This column uses data from over 130 years to suggest a model in which income in the US is a function of racial identity and human capital. While racial identity is transmitted inter-generationally, human capital is also affected by race, for example through educational attainment. Furthermore, shifts in labour market prices inhibit the convergence of wages across race.

Racial disparities in socioeconomic conditions remain a major policy issue throughout the world. This column applies a new neighbour-based measure of residential segregation to US census data from 1880 and 1940. The authors find that existing measures understate the extent of segregation, and that segregation increased in rural as well as urban areas. The dramatic decline in opposite-race neighbours during the 20th century may help to explain the persistence of racial inequality in the US.

US commentators regularly lament the country’s racial and ethnic inequality. This column presents data from 1870 and 1940-2000 to argue that the divide has its roots in the slave trade and that its legacy persists today through the racial inequality in education.

20 - 21 August 2018 / Goethe University Frankfurt / Central Bank Research Association (CEBRA) and the Research Center SAFE (Sustainable Architecture for Finance in Europe) at Goethe University Frankfurt